AT&T's Discount Bundles Fuel Subscriber Gains, Tax Savings To Supercharge Fiber Expansion
AT&T Inc. (NYSE:T) announced strong financial results for its fiscal second quarter of 2025 on Wednesday, surpassing analyst expectations for both revenue and earnings.
The telecom giant reported operating revenues of $30.80 billion, marking a 3.5% increase compared to the same period last year and exceeding the consensus estimate of $30.45 billion. Adjusted earnings per share (EPS) stood at $0.54, also beating the analyst forecast of $0.52.
Key Performance Indicators
The positive results were largely driven by significant growth in wireless phone subscribers, which AT&T attracted through various perks and incentives to draw customers away from competitors.
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The company reported 401,000 postpaid phone net additions, a slight decrease from 419,000 in the prior year but still a robust performance. This contrasts sharply with rival Verizon Communications (NYSE:VZ), which saw a net loss of 9,000 postpaid phone connections in its latest quarter, falling short of analyst predictions for a gain of 13,000.
AT&T’s postpaid phone churn, a measure of customer attrition, increased slightly to 0.87% from 0.70% a year ago, while prepaid churn was 2.64%, up from 2.57%. Despite this, the postpaid phone-only Average Revenue Per User (ARPU) grew by 1.1% year-over-year to $57.04.
In its Consumer Wireline segment, AT&T continued to expand its fiber optic footprint, adding 243,000 AT&T Fiber net subscribers and 203,000 AT&T Internet Air net additions.
Financial Highlights
AT&T demonstrated solid improvements across several metrics. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased to $11.7 billion from $11.3 billion in the year-ago quarter. The company’s net income rose to $4.9 billion from $3.9 billion previously, reflecting enhanced profitability.
Operating cash flow also saw a healthy increase, reaching $9.8 billion compared to $9.1 billion in the same quarter last year, contributing to a free cash flow of $4.4 billion, up from $4.0 billion. Capital expenditures for the quarter were $4.9 billion.
Looking at segment performance, the Mobility segment’s operating income grew 3.2% year-over-year to $6.93 billion, maintaining a strong margin of 31.7%, though slightly down from 32.8% a year ago. The Consumer Wireline segment showed significant improvement, with its operating margin expanding to 9.5% from 5.5%. Conversely, the Business Wireline segment reported an operating margin loss of 4.7%, a decline from a 2.1% positive margin in the previous year. Overall, operating income for the company was $6.5 billion, compared to $5.8 billion in the year-ago quarter.
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